Tag Archives: post-communist transition

Twenty years ago almost to the day, on February 21, 1990, the new president of then Czechoslovakia Václav Havel delivered a memorable address to the Joint Session of the U.S. Congress. It was an amazing time of change – the Soviet bloc was crumbling and the symbol of the East-West division, the Berlin Wall, fell only three months earlier. But it was also a time of great uncertainty when the outcomes of this sweeping change were still uncertain and the democratic transition that began in the region still feeble. Havel very well understood that building democracy is a long-term transformation. On a more philosophical level, he also appreciated that democracy can never really call itself complete but rather must always strive for improvements, just like human beings strive for but can never fully claim perfection. He said,

“As long as people are people, democracy, in the full sense of the word, will always be no more than an ideal. One may approach it as one would the horizon in ways that may be better or worse, but it can never be fully attained. (…) the salvation of this human world lies nowhere else than in the human heart, in the human power to reflect, in human meekness and in human responsibility.”

Twenty years ago today the Berlin Wall was dismantled, providing the most visible and resonating image of the emergence of democracy in Central and Eastern Europe. Yesterday US Secretary of State Hillary Rodham Clinton gave the keynote address at the Atlantic Council’s gala dinner in Berlin commemorating the events of 1989.

In her speech, Secretary Clinton recognized that, while the Wall’s destruction was perhaps the most memorable of the events that took place that year, it was just one of many smaller acts of courage and principle that allowed democracy to re-emerge in a region frozen in authoritarianism for half a century. In many ways, these acts have continued to this day, as reformers carry on the task of building institutions, combating corruption and resurgent authoritarianism, and encouraging civil participation in public life.

All of us in the development community recognize that, although much significant progress has been made, the future of reform in the post-Communist region is uncertain. A successful democratic society does not arrive with the first free election, nor is its survival guaranteed. Democracy is a set of rules, but a successful democracy requires people who understand the rules, and agree to abide by them. The practice of democracy, as the saying goes, requires the practice of democracy.

To provide reformers with a forum for reflection on the past two decades and discussion on what can be done in the next two, CIPE is organizing a two-day conference in Kyiv, Ukraine entitled “Twenty Years Since the Fall of the Berlin Wall: Lessons Learned and the Future of Reform.” The event, which will take place November 16-17, will bring together past and present CIPE partners to form strategies for addressing new challenges that have arisen, and older problems that have proven difficult to overcome.

Major systemic transformations in the post-Soviet states are over. Yet the outcome in most cases is not a full-fledged democratic market economy but rather an unsatisfactory compromise between socialism and free markets. Transition countries by and large focused their energies on creating a “social market economy” à la Western European welfare states. Thus, socialism as a system of completely centralized decision-making has been replaced by interventionism, a system with various degrees of state involvement in economic affairs. This “third way”-ism took the place of Marxism as an ideological pillar of the new post-communist world; however, it failed to produce a viable alternative to how the goal of greater social well-being can be accomplished.

In this Feature Service article, Jaroslav Romanchuk, Executive Director of the Analytical Center “Strategy” in Minsk, Belarus, talks about the persistence of the old redistributive, state-focused, and government-inspired way of thinking about achieving prosperity in most post-communist countries. Romanchuk criticizes insufficient attention paid to the uniqueness of country conditions and the consequences of the communist legacy in the design of transition reforms. He says, “Development strategies for many emerging economies often uncritically incorporated Western laws into domestic legislation regardless of the fact that these laws were crafted in different cultural and historical environments. As a result, transition governments faced many unintended consequences that increased the economic and social costs of transition.”

But it is not too late for transition countries to refocus on the essence of prosperity-generating reforms: economic freedom. It is economic freedom that delivers better social outcomes such as job creation, income growth, access to basic social infrastructure, education, and healthcare. Coupled with strong democratic institutions, values of hard work, and achievement, economic freedom is the best known vehicle for achieving robust economic growth and improved social well-being.

Article at a Glance

Transition governments in post-communist countries have been held back by a failure to understand and implement the essentials of democratic and market institutions.

The sudden shift from socialist to market systems exposed the weaknesses of many policy prescriptions indiscriminately adopted from the West.

State interventionism, which failed to generate greater social well-being, can no longer be an alternative to full-fledged democracy and free markets in the region.

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The CIPE Development Blog provides coverage of the Center for International Private Enterprise and its partner network at work -- highlighting successes, drawing out lessons from failure, and exploring the broader issues of political and economic development. For more information visit CIPE.org.